Select Sands Exercises Purchase Option to Begin Capacity Expansion
Project anticipated to be completed in 2H 2018
VANCOUVER, British Columbia, April 10, 2018 (GLOBE NEWSWIRE) -- Select Sands Corp. ("Select Sands" or the "Company") (TSXV:SNS) (OTCQX:SLSDF) is pleased to announce the Company has exercised its option to purchase a 223-acre property located in Independence County, Arkansas (the “Independence Property”) to serve as a platform to support the Company’s long-term operational and capacity expansion initiatives. Under the terms of a revised US$1,630,000 purchase agreement, the Company has paid US$250,000 and is obligated to make four additional annual payments of US $345,000 on April 4 each year plus 2% annual interest each year through 2022 in an owner financed arrangement. Once the expansion project is completed, Select Sands’ annual production capacity of industrial silica will increase by approximately 400,000 tons or 67% from 600,000 tons to approximately 1 million tons per year.
The Company plans to immediately build a new stand-alone 400,000 ton per annum production facility comprising of both wet and dry processing capability to be located on the Independence Property (the “expansion project”) and is anticipated to be completed in the second half of 2018. The expansion project estimated cost of $4.0 million to $4.5 million is anticipated to be funded through bank financing and is expected to significantly reduce production costs primarily through interplant transport savings. The decision to build a new 400,000-ton facility is a change in the Company’s plans. Originally, Select Sands had planned to simply increase the existing 600,000-ton facility to 1 million tons. The Company has determined that building a new stand-alone 400,000-ton facility with the additional greenfield startup tasks will be more cost effective and profitable for the Company but will delay ramping up production to 1 million tons per annum by one or two quarters from its original plan.
Advantage Highlights of the Independence Property:
- Sufficient acreage to complete the current expansion, with additional acreage available for future expansion of a new-build facility;
- Well suited for a future potential build of a 110-150 railcar loop track for efficient and economical loading of finished products;
- Elevated above the floodplain allowing for uninterrupted operations;
- Access to natural gas, three-phase electricity and water; and
- Located next to a large coal power plant and adjacent to state highway
Zig Vitols, President of Select Sands states, “We are very pleased to move forward on this project to meet the growing demand of our expanding customer base. The location of the Independence Property will further enhance current operations as it will reduce interplant transportation by up to 30 miles, with the associated lower operating cost. This demand driven expansion project complements the continuous quarter over quarter price increases being experienced.”
One of more follow-up press releases on the expansion project will be issued once the start date is determined and bank financing has been completed.
For further details of the property option agreement, please refer to the press release issued October 29, 2017.
About Select Sands Corp.
Select Sands Corporation is an industrial silica product company which owns a number of properties in Arkansas and is currently in production at its 100% owned, 520-acre Northern White, Tier-1, silica sands property located near Sandtown, Arkansas, U.S.A. Select Sands’ goal is to become a key supplier of premium industrial silica sand and frac sand to North American markets. Select Sands’ Arkansas properties have a significant logistical advantage of being significantly closer to oil and gas markets located in Oklahoma, Texas and Louisiana than sources of similar sands from the Wisconsin area.
Forward-Looking Statements
This news release includes forward-looking information and statements, which may include, but are not limited to, information and statements regarding or inferring the future business, operations, financial performance, prospects, and other plans, intentions, expectations, estimates, and beliefs of the Company. Information and statements which are not purely historical fact are forward-looking statements. The forward-looking statements in this press release relate to the timing of capacity expansion and the impact such expansion will have on the Company's operating results. Forward-looking information and statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking information and statements herein. Although the Company believes that any forward-looking information and statements herein are reasonable, in light of the use of assumptions and the significant risks and uncertainties inherent in such information and statements, there can be no assurance that any such forward-looking information and statements will prove to be accurate, and accordingly readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance upon such forward-looking information and statements. Any forward-looking information and statements herein are made as of the date hereof, and except as required by applicable laws, the Company assumes no obligation and disclaims any intention to update or revise any forward-looking information and statements herein or to update the reasons that actual events or results could or do differ from those projected in any forward-looking information and statements herein, whether as a result of new information, future events or results, or otherwise, except as required by applicable laws.
For more information about Select Sands Corp., please visit www.selectsands.com or contact:
Zigurds Vitols
President & CEO
Phone: (832) 917-6140
Investor Relations
Arlen Hansen
Phone: (604) 684-6730
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.